NZD/USD on the backfoot, greenback strong, eyes on 0.6720

• NZD/USD has been developing a bearish case.
• A break to the downside below the 10 and 21-D SMAs opens 0.6720 and then 0.6680.

NZD/USD has been on the backfoot on Thursday leading into the close of the week for Asian markets as the dollar caught a bid on the back and forth trade headlines. Currently, NZD/USD is trading at 0.6781, consolidating below the 200-hr SMA at 0.6789 with a low of 0.6779 and a high of 0.6851.

NZD/USD has been developing a bearish case below the ascending support line from 19th July business where the pair started to correct the supply from the double top highs in the 0.6850's where the bird has once again ran into resistance. 

It was a dollar story today and the greenback was higher on a number of counts. There was a fast deal between the EU and US which strengthen the hand of Washington and markets are expecting the tensions between the US and Bejing to escalate, weighing on the Chinese currency, supporting the dollar. Also, the euro was weaker after the ECB signalled that accommodation was still needed.

Still see prospects of a test higher again in the near term

Analysts at ANZ explained that, "after another attempt to break topside resistance yesterday, the kiwi had a softer night, despite what appeared to be positive headlines regarding trade. A large option expiry today around 0.68 is probably acting as a decent anchor but we still see prospects of a test higher again in the near term.

NZD/USD levels

Support is located at 0.6720 and resistance remains located at 0.6860. So long as the price holds the 0.6760 level, the bulls can hang in there. However, RSI is running out of flight and has turned lower on the daily sticks. If there is to be a continuation of the bid, a break of 0.6920, the June highs will come into focus. The 200-month moving average resistance at 0.7009 is next key level. A break to the downside below the 10 and 21-D SMAs opens 0.6720 and then 0.6680.